In 1970 Several cartoonist mets at the Sky River Rock Concert & Lighter than Air Fair in Washington State. These Cartoonists consisted of Robert London, Dan O'Neill, Gary Hallgren, Ted Richards and Sherry Flenniken, the trouble all started when O'neill's lawyer proclaimed that the copyright on Mickey Mouse had lapsed resulting in the cartoonist suggesting that the group gain control of the Disney Ips by creating their own versions of them.
Unfortunately none of this was true as Disney had renewed it's copyright on Steamboat Willie (the first Mickey Cartoon) in 1956 to make it last until 1986. The group took on the name "Air Pirates" for any work that they complete together, Ted Richards claimed that Walt Disney was nothing but a hack and by copyrighting his work he was preventing truly great artists contribute and improve upon his work. Being part of the Underground comic scene the brains behind the group wanted to run their publishing more like a business with monthly release schedules claiming that using Disney's IP justified this, in the end over 20,000 copies of the first two issues of "Air Pirates Funnies" were published. In the comics the cartoonists featured the lovable characters performing acts of which were uncharacteristic such as swearing, smuggling drugs and various sexual acts with each other. Fortunately The Disney Company never noticed, unfortunately the Air Pirates wanted to be noticed.
Eventually their work reach the Disney Execs and on October 21 1971 Disney Productions filed suit against the Air Pirates. Disney's case was straightforward, the Air Pirates had used copyrighted characters without permission and that they had violated their trademarks by replicating them to misguide consumers into think it's a Disney authorised product and that by showing sexual and criminal acts being performed by the characters also damages the brand that Disney has built up over the years.
Unfortunately the Pirates claimed that the work was produced in the tradition of Parody and Satire and that no consumer would mistake their portray of characters like Mickey for the ones created by Walt Disney. They also argued that since Disney has become a symbol of American Culture they were in every right to add their own ideas as it would transform the characters into a different expression of an artist, something that is outside of the company's copyright.
Subsequently the Air Pirates were charged with $20,000+ is damages and fees to be paid to Disney, but it didn't end there. O'Neill appealed to the U.S. Supreme Court in 1979 but was refused to a hearing, at a yet another hearing the Disney company demanded that O'Neill be prosecuted as a criminal but the Judge refused, over the course of 8 years the Air Pirates had cost The Disney Company $2 million in costs trying to pursue the group and in the end all they had to show for it was a written piece of paper from O'Neill promising that he would never draw Mickey Mouse again.
This is a rare case in which Disney had become so large and pivotal to culture that it had transended the usual means of copyright law as it is now considered as much as a part of american culture as Thanks Giving Day. This also shows an example of what can happen when copyright is breached or an IP is used in a way that the creator did not intend, the ins and outs of trials and the stress that go along with it. It's unlikely that everyone's work will reach a level of fame such as the Disney Toons but it's an important part of copyright history as the Airpirates essentially got nothing more than a slap on the wrist and a "now don't do it it again."